The Pakistan Stock Exchange (PSX) registered a notable fall on Wednesday as caution gripped investors amid escalating geopolitical tensions, particularly between the US and Iran and fears of a potential US strike on Tehran that lifted oil prices

The benchmark KSE-100 index dropped 1,381.69 points, or 0.75%, to close at 182,569.82, after swinging between the intra-day high of 184,727 and the low of 182,370. Profit-booking after recent gains kept market sentiment subdued for almost throughout the session.

Analysts were of the view that investors locked in profits at higher levels and shied away from taking fresh exposure as regional uncertainty deepened.

KTrade equities trader Ahmed Sheraz observed that the PSX closed under pressure, with the benchmark KSE-100 index settling at 182,570, down 1,382 points.

Market sentiment remained cautious throughout the session, primarily due to escalating geopolitical tensions between Iran and the US. Uncertainty surrounding a potential strike kept investors on sidelines, while regional markets also remained under pressure, with the PSX following the broader trend, he said.

Sector-wise, selling was broad-based across banking, cement, fertiliser, technology, power and pharma stocks. Scrip-wise, notable pressure was observed in United Bank, MCB Bank, Fauji Fertiliser, Lucky Cement, Hub Power, Habib Bank, PTCL, National Bank and Systems Limited.

Oil and gas stocks were the sole exception, supported by expectations of higher global crude prices, which helped OGDC and Pakistan Petroleum to close in positive territory.

Looking ahead, the market is expected to remain range bound and volatile in the near term until greater clarity emerges on the geopolitical front, Sheraz said and advised investors to remain cautious while gradually accumulating quality blue-chip stocks on dips.

A mixed activity was observed at the PSX as investors preferred a wait-and-see approach, booking profits at higher levels, which resulted in the benchmark index closing down by 1,382 points, said JS Global analyst Nawaz Ali.

Some major oil stocks including OGDC and Pakistan Petroleum remained in the limelight throughout the day, restricting index losses. Moving forward, Ali suggested investors to adopt a “buy-on-dips” stance with focus on oil & gas, banking and technology sectors.

Arif Habib Limited Deputy Head of Trading Ali Najib wrote in his report that consolidation persisted at the PSX, with the KSE-100 closing at 182,570, down 1,382 points. Market momentum remained subdued amid heightened geopolitical tensions as investors adopted a cautious stance in light of uncertainty surrounding the Middle East, he said.

Among economic reports, Bloomberg expects Pakistan’s recent inflation slowdown to 5.6% year-on-year to be temporary. The Consumer Price Index is projected to reaccelerate due to base effects, stronger demand and rising energy prices, with inflation potentially nearing 8% by 4QFY26. This outlook suggests that the State Bank is likely to maintain its policy rate at 10.5%, with upside risks stemming from potential oil price shocks, he added.

UBL, MCB Bank, Fauji Fertiliser, Lucky Cement and Hub Power emerged as major laggards on the index, dragging it down by 897 points. In contrast, OGDC, Pakistan Petroleum, Askari Bank, Meezan Bank and Atlas Honda attracted buying interest, adding 422 points, Najib said.

Overall trading volumes remained nearly flat at 1.03 billion shares compared with Tuesday’s tally of 1.04 billion. The value of traded shares stood at Rs66 billion.

Shares of 483 companies were traded. Of these, 90 stocks closed higher, 352 fell and 41 remained unchanged.

K-Electric was the volume leader with trading in 56.3 million shares, losing Rs0.02 to close at Rs6.33. It was followed by WorldCall Telecom with 55.7 million shares, falling Rs0.07 to close at Rs1.74 and Pakistan International Bulk Terminal with 47.5 million shares, rising Rs0.18 to close at Rs20.25. Foreign investors sold shares worth Rs648.2 million, according to NCCPL.